Blake Dowling: The insanity of the crypto revolution

The past decade (or two) has been ripe with cultural and tech revolutions of all shapes and sizes.

One of the big ones was the crypto revolution which rolled up like the insanity of the Popeyes Chicken Sandwich in 2009 (what was up with that, by the way?).

Techies, investors, and criminals all flocked in the direction of this new currency, and fortunes are still being made and lost each day in this volatile cyber market.

The crypto headlines are everywhere but our story today will focus on the struggle of good versus evil with two specific examples of the good guys/gals versus the bad guys/gals.

We start our tale in Miami with the good side and a company fighting crypto crime and misuse.

Cat Labs is led by former Department of Justice Special Agent Lili Infante. Her work with the DOJ was highly specialized on the Dark Web and cryptocurrency-related crimes, and she is bringing that much-needed expertise to the private sector with this venture.

She was credited as being part of the law enforcement task force that took down Hydra. Hydra was the oldest and largest Dark Web marketplace in existence and is now shuttered thanks to her contributions (along with others in a global task force).

The company refers to themselves as the “special forces” of digital asset recovery and cybersecurity and their leadership team boasts some highly robust IT pros.

Most websites have a “learn more” or “click here for quote” button; their website is slightly different. Their services are so specialized and sought after most of the tabs say click here to Join Our Waitlist. That is elite.

The bottom line is this company helps fight cybercrime and protect and recover digital assets like cryptocurrency.

On the other side is the bad guys; meet Jimmy Zhong.

Zhong is doing a short stint in federal prison due to some unlawful cyber moves, the opposite of what Infante and her team in Miami do. While Cat Labs protects digital assets, Zhong (it would appear) did the opposite and “liberated” 50,000 Bitcoins from an online Dark Web store Silk Road in 2012.

By “liberate,” I mean stolen, and the value of the heist this year is $3 billion.

In 2021, I wrote about Silk Road for Florida Politics. The website was a marketplace for drugs, fake IDs, weapons, and many other items in the shady category.

The site was shut down in 2023 by the FBI, but not before Zhong robbed them blind. Zhong was involved on the front lines of the very early days of Bitcoin. He used that knowledge to create several fake accounts on Silk Road and then exploited an error in the Silk Road site to withdraw more funds than he had in those online accounts.

You can take a deep dive into how he pulled this off in this technical column.

The 100-plus withdrawals covered multiple accounts, and it took milliseconds for the actual transactions to take place.

He took his digital haul and set up shop in Athens, Georgia, living by the downtown bars and being the life of the party every day.

His lavish approach to life included a private plane ride with friends to the Georgia National Championship, a lake house; the drinks are on me moments in a bar (regularly), limo rides to big events, and everything else you can imagine. It all went wrong one night when Jimmy called 911 to report a theft of some cryptocurrency that he had stolen years before and from there his world began to unravel.

You may be thinking that the Dark Web and Bitcoin are all untraceable. Not so fast because when Zhong was cashing in some Bitcoin in 2020, using his actual address at a cryptocurrency exchange, multiple law enforcement agencies began putting together the pieces after his 911 call.

Law enforcement went undercover to his lake house, pretending to investigate the crime he reported via 911 call, but after Zhong gave him a tour of his house and showed him his laptop, which included a fat Bitcoin purse on the screen, they knew they had their man.

Next came the raid, the trial, all his Bitcoin going to the Feds — and our villain is behind bars.

Crypto has crept into every aspect of our world (in one way or another).

Our stories today are just two tales from the vast landscape. We see crypto stories popping up in the political world also, like the Republican Primary Election for tax collector in Seminole County Florida. That battle was Joel Greenberg versus Brian Beaute and the rumors behind the scenes were of crypto mining, the Forward Party, NFTs and much more.

Florida Gov. Ron DeSantis is pro-Bitcoin, according to Forbes and other media outlets. His policies are for big government to stay out of it and that certainly appeals to lots of Floridians. As he continues his push for the White House, we will see where the international race goes among the nations to be #1 in digital currency.

Digital currency is here to stay.

The guy who helped bring Twitter to the world summed it up a while back; that’s all for today, ladies and gents.

“What inspires me the most [about Bitcoin] is the community driving it. It reminds me of the early internet. It’s deeply principled, it’s weird as hell [and] it’s always evolving. It just reminded me of the internet as a kid.” — Jack Dorsey.

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Blake Dowling is CEO of Aegis Business Technologies and can be reached at [email protected].